“We view the situation at Multi-Links in Nigeria in a seriouslight,” Telkom’s CEO Reuben September told a results presentation in Sandton, Johannesburg.<\/p>\n
On Monday, the group released its results for the 2009 financial year which showed a 45.9 percent fall in headline earnings per share.<\/p>\n
Net income decreased by 47.7 percent to R4.17 billion in the year ended March 31, 2009.<\/p>\n
The results showed that Telkom’s Nigerian operations had made a loss of R1,76 billion.<\/p>\n
“Nigeria is not immune to the global meltdown — it’s an oil based economy,” September said.<\/p>\n
“We saw the weakening of the naira against the dollar… we ended up with a forex loss of R902 million.”<\/p>\n
Turnaround plans including increasing Multi-Link’s focus on corporate and small, medium and micro enterprise (SMME) markets.<\/p>\n
Another plan was to increase revenue from fixed-wireless and mobile customers through “brand awareness and promotion”, September noted.<\/p>\n
Multi-Links would also expand broadband internet to offer high-value bundles.<\/p>\n
Through its extensive fibre network it will provide high quality internet protocol\/next generation network services to the government, corporate and SMME customers while extending its metro-ethernet services, September added.<\/p>\n
Average revenue per user, which fell from US32 to US9 during the year has been targeted at US10 for the next year, Telkom’s CEO said.<\/p>\n
September added that capital expenditure of US100 million for the 2009\/10 financial year had been budgeted for — with the primary objective of adding an additional 1000km of fibre.<\/p>\n
Telkom planned to have a national fibre network in place that would connect all major cities with metro fibre rings in Nigeria’s top five cities, September said.<\/p>\n
“We expect Multi-Links to be cash flow positive by 2011\/12,” he added.<\/p>\n
Turning around Multi-Link’s performance was vital to Telkom “given the extent of the group’s investment and the enormous opportunity the Nigerian market provides”, September said.<\/p>\n
Telkom acquired 75 percent of Multi-Links in 2007 and in 2009, it purchased the remaining 25 percent.<\/p>\n